Angela and Jay Fox thought they were well prepared for a worst-case scenario.
They had braved the uncomfortable talk about last wishes — Jay wanted no part of a regular hearse. Instead, he wanted his coffin and family brought to the graveyard in an old farm truck.
They had wills and life insurance. They knew where they wanted to be buried — a potential flashpoint, since they had broken away from their childhood homes in Saskatchewan to take over an Eddystone beef operation — and had decided a family friend, not a relative, would care for their kids in the case of an accident, until their oldest son turned 18, something that would keep their four children in the region.
They even had plots at the local cemetery, although Angela thought Jay was being ridiculous when he bought them, since the pair was only 30 years old.
On Dec. 23, 2011, all that planning was put to the test and that worst-case scenario became terrible reality. In the time it takes for a front-end loader bucket to drop, and the aftermath following, Fox lost her husband, became a single mother of children ranging from 14 to two years old and suddenly found herself the sole proprietor of their farm.
“I think that lots of times people overlook the impact that it’s going to have on their operation to lose one person, because everybody’s grieving,” she said. “I think we overlook that. We think, ‘Well, the operation will go on. The operation will be fine,’ but nobody in that operation is fine, so it’s a big change.”
Fox has since found out that they were, in fact, comparatively well prepared for the worst, but it was not enough to avoid a laundry list of logistical, legal and financial problems in the wake of her husband’s death.
She found herself cut off from the farm’s money, a joint account set up so that both partners were needed to approve transactions.
“Everybody should have their own bank account and everybody should have their own credit card because if you run off of a business account, you have to be able to operate that next day,” she advised this year’s Manitoba Farm Women’s Conference.
If they do find themselves in the same situation, she added, stop any flow into the locked account until the issue is sorted out and give new money to a lawyer to hold in trust.
Next, she ran into a possible will probate, a common course when someone might contest the will or its execution.
Fox was furious at what she saw as an unnecessary measure and an extra cost for the farm and turned to her sister-in-law, a lawyer, for help. The looming probate was eventually dropped.
In Manitoba, probate fees claim $70 for the first $10,000 of an estate, plus 0.7 per cent of every $1,000 value after that.
On a farm, where a $1-million value is not uncommon, those fees can add up.
Laura McDougald-Williams of Meighen Haddad LLP in Souris says there is little difference between selling an asset and transferring ownership due to death in terms of tax. The local lawyer says she has seen many clients run into that trap when it comes time to execute an estate.
“Whatever goes into your estate at the time of your death would be any assets that you own in your name alone at the time of death,” she said. “Unfortunately, I’ve had a few estates where all the farmland was in the husband’s name. The husband passes away and the wife is then left having to probate the husband’s will because land titles always require a probate order on the will to have it transfer over to the beneficiaries.”
In one, memorable case, probate tax turned into a $20,000 price tag for a client, including $7,000 for the tax itself, plus $13,000 in administration fees, a number McDougald-Williams says is also government mandated.
“This is so preventable,” she said. “If the land had been owned in joint names, for less than $500 we can do a land transfer form, which adds the spouse on to the title. There’s no land transfer tax paid because, even if the spouse isn’t involved in farming, she’s the spouse of a farmer, so she’s exempt from land transfer tax.”
Life insurance, which the Fox family put in place to help, actually turned into another obstacle.
Jay Fox had passed away on farm, making the death a workplace accident. His wife relayed her difficulty in getting health-care documentation as her husband was transported off the farm, to Dauphin and eventually flown to Winnipeg.
“It takes a lot of money to die,” Fox said, urging conference-goers to keep contact with their family doctors to help with documentation. “We might think that we have insurance that will come, but it takes time. It takes a lot of time to get all the paperwork done and everything before money can start flowing back into your operation.”
‘Because I Love You’
Fox, along with another farming widow, Maggie Van Camp who is also an associate editor with Country Guide magazine, now hopes her story can help others avoid those pitfalls.
The pair has launched the “Because I Love You List,” a checklist of important information they urge farm partners to share while both are still whole and healthy.
Some of those line items should come as no surprise — although Fox noted that some basic precautions, like having an up-to-date will or sharing contacts for family physicians, lawyers, bank accounts and funeral wishes, are often overlooked.
Others may slip through the cracks, particularly if a partner is only casually involved with the farm, she said.
Mechanics’ names and veterinarian contacts may fall by the wayside if another partner always takes care of those things, she said. Both partners might not be aware of rental agreements or landownership issues. How many payments are left on that combine? Are there investments or RRSPs? What kind of short-term or long-term help is available from neighbours and friends? What are the passwords to any online accounts?
Those questions are just a taste of the information that should be shared freely on the farm, she said.
“Rather than thinking about it as a burden, to go over this list and sit down, you need to think about it as a gift to your loved ones, to your family, because if anything ever happens and you have this list that has absolutely everything on it for them, it makes their life so, so much easier in a time where they’re going to need a lot of help,” Fox said.
McDougald-Williams says she has added the list to all her estate planning sessions.
Grief, shock and decisions
Shock and grief are near inevitable after a farm loss, particularly if, like the Fox family, the loss came without warning. But for many fighting through the aftermath, most of whom are not in the best frame of mind for life-changing decisions, the death of a farm partner may also come with a surge of questions on the future of the operation.
The first question, according to Jacqueline Gerrard, a consulting associate for agribusiness advisers Backswath Management, is whether the remaining partner will continue to farm at all. If so, to what degree will they farm? Can they maintain the farm at its current levels?
“Pre-thinking” a loss may help smooth over that decision, she said. Another speaker at the 2017 Manitoba Farm Women’s Conference, she advised attendees to map out what they know about the operation, what they don’t know, and what kind of help they would need if they suddenly find themselves managing the farm alone.
In some cases, like Fox, they might be an equal partner fully able to take over the farm. In other cases, she said, a partner may have a primary off-farm job and maintaining the farm would require a career change.
“I think if you were thrown into a management role that you weren’t really prepared for, you would find out a whole bunch of stuff that you didn’t know that you didn’t know,” Gerrard said.
If farming is not in the future, what happens to the land? Will it be sold or rented? Will the family have to move?
Fox faced similar questions, despite being an active farm partner. Her family was in Saskatchewan, and few would blame her for wanting to move closer to that support. At the same time, Eddystone was home to her and home to the company she had built with her husband.
If she was to stay, she was “all in,” she said. She would need to keep cattle, since the ranch depended heavily on their Crown land leases and livestock were part of the deal. Otherwise, she would significantly devalue their ranch.
In the end, she opted to stay where she was.
“My message will always be, ‘Preplanning gives you choices and choices give you time.’ So make sure you do your preplanning so that you can make good choices at the end,” she said.
Knowing where you sit
All farm partners should be familiar with the operation’s value and there should be annual finance review with the farm’s banker and all partners, regardless of how involved they are on the farm, Gerrard said.
The advantage of that is twofold, she added. First, that communication will familiarize a non-farming partner with the business financials. At the same time, that meeting ensures the banker is familiar with all farm partners.
“Talk to your farming team about, ‘What is the vision?’” she said. “What are the things that have been put in place already for the future of the farm that I don’t want to mess up if something happened and I was to take over or that a new management team came in?”
Likewise, she said, all parties should be aware of operating income, financing agreements, debt, tax situation and who the farm deals with for business.
Land deeds, and which assets are in whose name, also warrant a second look, McDougald-Williams said.
An accountant might single out tax breaks and ways to defer or spread out capital gains taxes, she said.
A will, she added, is also critical, and not having one may cause problems starting with disagreement on who will administer the estate and running through beneficiary designations and additional administration costs.
“If you don’t have a will, your spouse, your children, your next of kin are your beneficiaries, but that can be problematic in the case of, say, a blended family,” she said.
Additionally, fair does not always mean an equal split, Fox said.
In the case of multiple children where some have moved away and others stayed on farm, she argued that it wouldn’t make sense to split the farm evenly, since the on-farm child has invested more in the operation and might count on it for his or her livelihood.
Farming won’t wait
Fox became intimately acquainted with the flood of sudden decisions while still operating a farm.
In the midst of mourning her husband and raising her children — who were also grieving — lambing started, chores had to be done and, being winter in Manitoba, the waterer froze.
“We had a big ranch that also needed to be ran (sic) and it didn’t sit still the next morning,” she said. “At the time, we had about 400 momma cows. We had just shipped calves, so we had the feedlot pens full and every single morning when I would go out, I swear the waterer was frozen.”
The loss of an able-bodied worker and half of her farming partnership has also meant some changes on the farm.
Marketing was never Fox’s strength and was not something she enjoyed, but she has had little choice but to take it on if she wanted the farm to survive. Likewise, anything her husband once handled is now up to her to do or find help to accomplish.
The farm now spends more on mechanics’ bills, she says, and the herd has downgraded from 400 cow-calf pairs to about 200 although the 11,000-acre land base has stayed the same.
Not all days are good days, she says. She still breaks down, both emotionally and mechanically, in the tractor. Her family is still in Saskatchewan, although her father came to help right after the accident. She still gets help from her neighbours and speaks to her mother-in-law every day.
“I would tell myself to take more help,” she said, in retrospect. “I wasn’t good at that and I think that I would definitely tell myself to take more help, to let other people help me and to be easy on myself, I think — that I don’t have to do it all right now. It takes time.”
Looking back, she says she was fortunate that she and her husband had planned as much as they had, up to and including the grave plot that she didn’t want, but ended up filling that same year. At the same time, her husband’s death revealed a host of issues that she never thought might become a problem.
She is still scaling a steep learning curve when it comes to farming alone. She is still chasing after her kids, although the oldest is now an adult. She still has to call the mechanic on a regular basis.
At the same time, her family’s farm has survived.
“Right from the moment it happened, I knew that I didn’t want this moment to define us,” she said. “I didn’t want this to be the only thing that people remembered about Jay, and I didn’t want it to be the only thing that people remembered about our family or what we had done with our lives. There’s more to us than that moment and there’s more to Jay than his death.”